It has been a few years since we could say without qualifiers that the forecast for the commercial roofing industry is bright, but that is certainly the case as we look ahead to the remainder of 2024.
While we must remain on alert for unanticipated challenges, most issues that have caused concern since the start of the decade have worked themselves out, particularly in our region.
Confidence Is High
With interest rates stabilizing and even decreasing, there has been an influx of investment groups and developers who may have been holding off on projects that are ready to move forward. The general contractors Register Roofing works with regularly are extremely busy, and they expect to remain active through at least the first half of 2025.
Our influx of direct work and bidding requests from corporations, property managers, and building owners is also at an all-time high. Businesses in our area are performing well, and now is an ideal time for many to make a fully depreciable capital investment in their facilities. These projects have Register Roofing at an exciting backlog position, and requests are in our project pipeline to keep us there.
Labor Is Plentiful
The labor situation in the commercial roofing industry has significantly improved over the last several months. What was once trending as a challenge is now an opportunity.
An influx of quality workers has enabled us to source and hire high-quality tradespeople and get them on our projects. The talent pool among the labor subcontractors we utilize is deep, and experienced roofers are excited to come to work for established corporations that value their employees and have a cultural commitment to safety and proper benefits.
This positive trend in labor recruitment is critical for sustaining growth and meeting the increasing demand for roofing services.
Materials Pricing Is Generally Stable
The supply chain issues and general lack of availability that caused wild fluctuations in materials pricing in prior years have worked their way out of the system.
Stabilization is especially evident with low-slope materials like insulation, membranes, and bitumen products. We saw a substantial lowering of these prices midway through 2023 and are seeing these costs flatline year-over-year.
Steel is one material segment of concern. Multiple manufacturers closed aging plants when demand was low during the UAW strikes at the end of 2023 and are attempting to meet resurgent demand with their reduced capacities.
The adjustment has created a temporary supply shortage. Register Roofing has seen a 10-20% cost increase in Q1 for steel products, including fasteners, roof panels, flashing, and siding. Industry economists expect this cost increase will only last a few months until steel producers adjust their capabilities to close the shortfall.
Warranties are another variable cost manufacturers control and another area where commercial roofing contractors are beginning to find relief. Warranty fees reached their highest levels when manufacturers faced high product demand. Now that supply and demand have equalized, manufacturers are returning to tier-one contractors offering 20- and 30-year warranties with normalized rates comparable to previous years.
Some Sectors Are Red Hot. Others Are Cooling.
In previous years, increased capacity at JaxPort and other industrial opportunities created a massive surge in demand for warehouse space. While that need has been fulfilled in our area for the most part, other sectors are filling the void.
Register Roofing has seen notable increases in government projects, especially at the city and state levels. These projects are driven by relief funds explicitly earmarked for infrastructure and facility maintenance improvements. The healthcare sector is also very active, with significant capital funneling into expanding and upgrading healthcare facilities.
Full Speed Ahead
After years of cautiously waiting to see what impacts external factors may have on the commercial roofing industry, Register Roofing is now bullishly moving forward. Things like the upcoming election's outcome could slow investment, but with such high demand and so many projects on the books, it is unlikely to cause a noticeable dip.
We will always be vigilant, but for now, we are in full growth mode, expanding our teams and capabilities to capitalize on the current boom.
Overall, we see no signs of anything but optimism for the remainder of 2024 and into next year. The resilience of the commercial roofing industry in the post-pandemic years has strengthened established contractors.
We will keep a strategic eye on market trends, material pricing, and labor dynamics, but we are poised to take advantage of opportunities and navigate unforeseen challenges. As we remain committed to quality, innovation, and customer satisfaction, 2024 will definitely be the best year we’ve had in recent memory and could be one of the best of all time.